PREMIUMS Premiums are payable in advance by the Policyholder. The first premium is due on the effective date of the Policy. Subsequent premiums are due on the first day of each calendar month thereafter. The required premium due on each premium due date is the sum of the premiums for all Insureds and their Dependents covered under the Policy. The premiums due will be determined by applying the premium rates then in effect for each plan provided by the Policy to the number of Insured Persons. All premiums are payable to the Company at the Company’s home office or to any of the Company’s authorized agents. The premium due may be adjusted due to a change in insurance as requested by the Policyholder or as required by the Company as follows: 1. if an amount of insurance is added or increased during a calendar month, premiums will be increased as of the date the change becomes effective, unless otherwise mutually agreed; 2. if an amount of insurance is deleted or decreased during a calendar month, premium will cease or be decreased at the end of the calendar month in which the deletion or decrease occurred, unless otherwise mutually agreed; 3. if the Policyholder’s contribution percentage is changed, premium will be adjusted at the end of the calendar month in which the change occurred, unless otherwise mutually agreed; or 4. if the number of eligible employees increases or decreases by more than 10% premium will be adjusted at the end of the calendar month in which the increase or decrease occurred, unless otherwise mutually agreed. If premiums are due the Company or premium refunds are due the Policyholder as a result of clerical error or delay in the reporting of dates and/or data to the Company, all premiums or refunds will be calculated at the current rate of premium payment and are limited to a maximum period of the current month plus six months. Premium Rate Change. The Company has the right to change the premium rate on or after the fourth Policy Anniversary Date. The Company will provide written notice at least 31 days before the date of change. Grace Period. A grace period of 31 days will be allowed to the Policyholder for the payment of each premium due after the first premium. The Policy will remain in force during the grace period. If the required premium is not paid by the end of the 31-day period, the Policy will terminate. The Policyholder will be required to pay premium for the grace period. Return of Premium. The Company reserves the right to rescind the coverage for one or all Insureds due to misrepresentation or fraud on the Policyholder’s application or an Insured’s enrollment form, if such misrepresentation materially affected the acceptance of the risk. If, on the date coverage is rescinded, no claims have been paid under the Policy, the Company will return all premiums paid for such coverage to the Policyholder. If, on the date coverage is rescinded, claims have been paid under the Policy, the Company reserves the right to deduct from the premiums to be returned to the Policyholder an amount equal to the amount of such claims paid. TERMINATION OF POLICY The Policyholder or the Company may terminate or cancel the Policy on the earliest of the following: 1. any date on or after the fourth Policy Anniversary Date the Company requests termination. Written notice must be provided to the Policyholder at least 31 days prior to termination; 2. any date on or after the date the Company receives the Policyholder’s written request for termination; 3. the date the number of persons covered under the Policy does not meet the minimum participation requirements of 10; 4. the date the required premium has not been paid, except as provided in the Grace Period provision; or 5. the date 100% of the eligible employees are not covered when a contribution is not required by the employee. M-9184 2